Munich, 29 July 2011 – The technology company The Linde Group continued to achieve profitable growth in the first half of 2011. "We are well on our way," said Professor Dr Wolfgang Reitzle, Chief Executive Officer of Linde AG. "We've seen a strengthening of demand in both our gases business and our engineering business worldwide." Reitzle is also confident about the coming months: "We will continue to benefit from the growth areas energy and health and from consistently dynamic trends in the emerging economies, especially in Asia. We confirm our outlook and expect to achieve growth in Group sales and Group operating profit in the 2011 financial year compared with the prior year."

In the first half of 2011, Group sales rose by 11.0 percent to EUR 6.774 bn, compared with sales in the first half of 2010 of EUR 6.104 bn. After adjusting for exchange rate effects, the increase in sales was 10.3 percent. Linde is continuing the rigorous implementation of its HPO (High Performance Organisation) programme, a holistic concept for sustainable process optimisation and productivity gains, and increased Group operating profit* by 11.7 percent to EUR 1.559 bn (2010: EUR 1.396 bn). The Group operating margin rose to 23.0 percent (2010: 22.9 percent).

During the reporting period, the general economic recovery also fuelled demand for gases worldwide. Linde was able to benefit from this positive trend in all product areas, due to the Group's global footprint and its strong market position in the emerging economies.

Sales in the Gases Division in the first six months of 2011 grew 10.2 percent to EUR 5.436 bn, compared with sales in the first six months of 2010 of EUR 4.931 bn. On a comparable basis, i.e. after adjusting for exchange rate effects, changes in the price of natural gas and changes to Group structure, the increase in sales was 8.5 percent.

Operating profit in the Gases Division rose 10.9 percent to EUR 1.483 bn (2010: EUR 1.337 bn). One of the factors contributing to the increase was the strict implementation of Linde's HPO measures. The operating margin rose to 27.3 percent, exceeding the high figure achieved in the first six months of 2010 of 27.1 percent.

Business trends in the individual operating segments of the Gases Division make it clear that the pace of economic recovery still varies from region to region. In the first six months of 2011, the highest growth rates were once again to be seen in the emerging economies of Asia, especially China, and in South America. At the same time, the economic recovery continued in the more mature markets such as the US and Western Europe.

In the EMEA operating segment (Europe, Middle East and Africa), Linde achieved sales growth of 8.1 percent in the first half of 2011 to EUR 2.824 bn (2010: EUR 2.613 bn). On a comparable basis, the growth in sales was 5.9 percent. Operating profit again increased at a faster rate than sales, rising 9.5 percent to EUR 807 m (2010: EUR 737 m). This resulted in an operating margin of 28.6 percent (2010: 28.2 percent). Here too, the rigorous implementation of the various productivity improvement and process standardisation initiatives under the HPO programme made a positive contribution.

Linde achieved a double-digit growth rate in the Asia/Pacific operating segment due to continued economic dynamism in Asia and its leading position in those markets. In the first six months of 2011, sales in this region grew 17.5 percent to EUR 1.473 bn (2010: EUR 1.254 bn). On a comparable basis, the increase in sales was 11.2 percent. Operating profit rose by 15.3 percent to EUR 406 m (2010: EUR 352 m). The operating margin for the six months to 30 June 2011 was 27.6 percent (2010: 28.1 percent). When comparing the operating margin for the first half of 2011 with that for the first half of 2010, factors to be taken into account are the pass-through of increases in the price of natural gas and the preliminary investment required for infrastructure expansion and the employment of new staff in the dynamic Chinese market. To sustain steady profitability, Linde is continuing here too with the rigorous implementation of the HPO concept.

In the Americas operating segment, sales in the first half of 2011 grew 7.1 percent to EUR 1.173 bn (2010: EUR 1.095 bn). On a comparable basis, the increase in sales was higher, at 11.8 percent. Operating profit improved by 8.9 percent to EUR 270 m (2010: EUR 248 m). Factors contributing to this increase in earnings, apart from higher volumes, were the progress made by Linde in the implementation of HPO and positive one-off effects in the first quarter of 2011. The operating margin rose to 23.0 percent (2010: 22.6 percent).

The performance in the individual product areas reflects the overall positive trend in the Gases Division. The highest rate of growth was in the on-site business, where Linde supplies gases on site to major customers. Boosted by the continuous ramp-up of plants which came on stream in the third and fourth quarters of 2010 and by the start-up of new plants, sales in this product area rose on a comparable basis by 11.4 percent to EUR 1.331 bn (2010: EUR 1.195 bn). The upward trend in Linde’s liquefied gases and cylinder gas business continued to accelerate. Cylinder gas sales grew 8.0 percent to EUR 2.224 bn (2010: EUR 2.060 bn). Sales of liquefied gases in the first six months of 2011 increased by 7.8 percent to EUR 1.297 bn (2010: EUR 1.203 bn). The Healthcare product area (the medical gases business and related maintenance and advisory services) again saw steady growth, achieving sales of EUR 584 m, an increase of 5.4 percent over the figure for the first half of 2010 of EUR 554 m.

Gases Division – Outlook

Linde remains committed to its original target in the gases business of growing at a faster pace than the market and continuing to improve productivity. In the on-site business, Linde has a full project pipeline which will make a significant contribution to sales and earnings in the 2011 financial year. The liquefied gases and cylinder gas business is set to benefit from the ongoing economic recovery. Linde expects positive business trends in the Healthcare product area to continue, with a higher rate of sales growth than in 2010. Against this background, Linde anticipates that sales generated by the Gases Division in the 2011 financial year will exceed sales achieved in 2010 and that operating profit will grow at a faster pace than sales.

Engineering Division

The market environment in the international large-scale engineering business continued to stabilise in the course of the first half of 2011.

Sales in the Engineering Division in the first six months of 2011 increased by 12.0 percent to EUR 1.226 bn (2010: EUR 1.095 bn). The continuing successful execution of a number of individual projects meant that operating profit grew at a faster rate than sales, rising 14.6 percent to EUR 141 m (2010: EUR 123 m). The operating margin was 11.5 percent (2010: 11.2 percent).

Order intake in the first half of 2011 was EUR 1.149 bn, 19.4 percent above the figure for the first half of 2010 of EUR 962 m. In the second quarter of 2011, two major orders from China and Indonesia had a significant impact on order intake. The first of these orders, to supply a hydrogen and synthesis gas plant commissioned by Linde's Gases Division in the Chongqing Chemical Park, was worth around EUR 200 m. The second order, worth EUR 88 m, was for Linde to build an air separation plant to supply gases to the steel company PTKP in Indonesia.

In addition to these major orders, order intake was characterised by a number of small and medium-sized new orders, as in previous quarters. Linde's order backlog remains high. At 30 June 2011, it stood at EUR 3.763 bn (31 December 2010: EUR 3.965 bn).

Together with its project partner SBM Offshore (Netherlands), Linde's Engineering Division entered into a cooperation agreement during the reporting period with the Thai oil group PTT (Petroleum Authority of Thailand) to develop a floating natural gas liquefaction plant in the Timor Sea off the northern coast of Australia. The project will involve the conversion of natural gas from three gas fields into LNG (Liquefied Natural Gas). If the gas reserves meet expectations, the project will move into the front-end engineering and design phases by the end of 2011. The final investment decision would be made at the end of 2012. Commercial production would be expected to commence at the end of 2016.

Engineering Division – Outlook

The high order backlog provides a good basis for a solid business performance in the Engineering Division over the next two years. Linde expects to achieve the same level of sales in its engineering business in the 2011 financial year as in 2010. Given the positive trends in the first half of the year, the Group expects to achieve an operating margin in the current financial year of at least 10 percent. In the medium term, the target for the operating margin continues to be 8 percent.

Linde is well-positioned in the market for olefin plants, natural gas plants, air separation plants and hydrogen and synthesis gas plants and will derive lasting benefit in particular from investment in the two structural growth areas: energy and the environment.

To coincide with the publication of the quarterly financial statements, a teleconference for analysts will take place today at 2pm (German time) in English with Georg Denoke, CFO of Linde AG. Journalists will have the opportunity to listen to the conference live by dialling +49.69.589.99-0509. Please give the reference number 894634 and tell the operator your name and the name of your company. Following the teleconference, you will be able to hear a recording of the event by calling +49.30.726.16-7224. Please give the reference number 894634.

The Linde Group is a world-leading gases and engineering company with around 49,100 employees working in more than 100 countries worldwide. In the 2010 financial year, it achieved sales of EUR 12.868 bn. The strategy of The Linde Group is geared towards sustainable earnings-based growth and focuses on the expansion of its international business with forward-looking products and services. Linde acts responsibly towards its shareholders, business partners, employees, society and the environment – in every one of its business areas, regions and locations across the globe. Linde is committed to technologies and products that unite the goals of customer value and sustainable development.